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Exam 7: Variable Costing and Segment Reporting: Tools for Management

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Question 91

Multiple Choice

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The unit product cost under absorption costing in Year 2 is closest to:

A) $9.00
B) $19.00
C) $28.00
D) $33.00

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Question 92

Multiple Choice

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What is the net operating income for the month under absorption costing?

A) $7,000
B) $4,600
C) $11,600
D) $24,200

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Question 93

Multiple Choice

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The Eastern Division's break-even sales is closest to:

Waltzer Corporation has provided the following data for its two most recent years of operation: Required: a.Assume the company uses absorption costing.Compute the unit product cost in each year. b.Assume the company uses absorption costing.Prepare an income statement for each year. c.Assume the company uses variable costing.Compute the unit product cost in each year. d.Assume the company uses variable costing.Prepare an income statement for each year. e.Prepare a report in good form reconciling the variable costing and absorption costing net incomes.

The net operating income (loss) under absorption costing in Year 1 is closest to:

What is the company's overall net operating income if it operates at the break-even points for its two divisions?

What is the net operating income for the month under variable costing?

Which of the following statements is true for Year 2?

What is the net operating income for the month under variable costing?

The company's net operating income for the year under variable costing would be:

A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

Net operating income computed under variable costing would exceed net operating income computed using absorption costing if:

Davitt Corporation produces a single product and has the following cost structure: Required: Compute the unit product cost under variable costing.Show your work!

The unit product cost under variable costing is closest to:

Under absorption costing, a portion of fixed manufacturing overhead cost is released from inventory when production volume exceeds sales volume.

A reason why absorption costing income statements are sometimes difficult to interpret is that:

Uchimura Corporation has two divisions: the AFE Division and the GBI Division.The corporation's net operating income is $42,000.The AFE Division's divisional segment margin is $15,700 and the GBI Division's divisional segment margin is $175,400.What is the amount of the common fixed expense not traceable to the individual divisions?

Sales in Store J totaled:

Nuzum Corporation has two divisions: Division M and Division N.Data from the most recent month appear below: Management has allocated common fixed expenses to the Divisions based on their sales.The break-even in sales dollars for Division N is closest to:

Succulent Juice Corporation manufactures and sells premium tomato juice by the gallon.Succulent just finished its first year of operations.The following data relates to this first year: Required: Using absorption costing, prepare Succulent Juice Corporation's income statement for the year.